The deepening Iran conflict is inflicting severe economic stress on Bangladesh, marked by soaring fuel prices and energy shortages disrupting everyday activities, businesses, and industries nationwide. Long lines at fuel stations, power outages, and escalating transport expenses have become commonplace in Dhaka. Many households are struggling to keep up with rising living costs as inflation surges from global energy crises associated with the Middle Eastern conflict.
Tariqul Islam, a ride-sharing driver in Dhaka, exemplifies those grappling with the fallout. After depleting savings from his clothing business, he shifted to ride-sharing for income. However, ongoing fuel shortages have left him waiting for long stretches at petrol stations. He notes that this scarcity has slashed his daily earnings, creating a real concern that survival in Dhaka will grow increasingly difficult for his family.
Bangladesh's dependence on imported fuel means that a significant portion of oil and gas flows through the Strait of Hormuz, a vital shipping lane embroiled in the Iran conflict. As global fuel prices soar, the country suffers from shortages of gas and diesel, triggering more frequent power outages in industrial zones. Although the government has ramped up fuel supplies, worries about long-term economic repercussions persist.
To tackle the energy crisis, the government has deployed several emergency measures, including limiting office hours, curtailing shopping mall operations, and introducing fuel rationing in certain areas. Bangladesh is also exploring alternative fuel sources and seeking foreign financial aid. Notably, neighboring India has responded favorably, supporting fuel supply negotiations as Bangladesh grapples with climbing import expenses.
The economy is bearing additional strain from rising energy subsidies; experts caution that should global prices continue to escalate, Bangladesh might face over a billion dollars in added costs for fuel and LNG subsidies. both the World Bank and the Asian Development Bank have downgraded their economic growth forecasts for Bangladesh, forewarning of worsening inflation and unemployment if the conflict in the Middle East persists.
Furthermore, the garment sector, crucial to Bangladesh's economy, is suffering significantly. Factory owners report that exports to Europe and the U.S. are slowing down due to increasing operational costs and energy instability. Ongoing power cuts have compelled manufacturers to spend more on diesel generators, while material prices for items like sewing thread, plastic packaging, and cartons have surged sharply, linked as they are to petroleum products.
Business leaders express concern over markedly reduced factory output in recent weeks and the potential for international customers to redirect orders to countries such as India, Vietnam, and Cambodia if the crisis lingers. Bangladesh ranks as the world's second-largest garment exporter following China, supporting nearly four million workers, primarily women from rural backgrounds. Workers now live in fear of losing their jobs if production diminishes or factories shut down due to rising operational expenses.
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